__economic thinking about sports__

Hurd on the Street

Bears wide receiver Sam Hurd, who was arrested Wednesday on federal drug charges, was a top drug dealer in Chicago and police have a list of NFL players who were supplied drugs by the receiver, a law enforcement source told 670 The Score.

The article says that Hurd and another person were allegedly distributing around 4 kilograms of coke per week in Chicago, but they wanted to get as much as five to ten kilos and about a thousand pounds of marijuana to sell. According to the article, Hurd was willing to pay upwards of $700,000 per week for the higher haul.

We might be tempted to say that this sort of behavior can’t be rational. Why would an NFL millionaire, playing out his dream, be willing to risk it all to deal drugs? The answer is that, assuming Hurd is motivated by cash, if the chances of getting caught are sufficiently low and the net cash generated by the dealing is sufficiently high, it is a very rational decision.

A quick back-of-the-envelop calculation shows how lucrative the coke sales alone can be. A gram of coke can fetch between $80 and $100 per gram on the street, so a kilo would bring about $80,000 – $100,000 in gross revenue. Each kilo, according to the article costs the dealer about $25,000 which would bring the net income (ignoring other costs) to $55,000 – $75,000 per kilo. At 4 kilos per week, that is $220,000 – $300,000 off the coke alone. At 10 kilos a week, the net income would then be $550,000 to $750,000 per week.

Hurd earned $1.5 million playing for the Cowboys in 2009, so even after including other costs in the net income calculation, it’s almost certain that his take from dealing was more, maybe far more, lucrative than what he earned on the field.

If it is a rational decision for Hurd, wouldn’t it be a rational decision for anyone making less than 1.5 million legally also get into drug dealing? Obviously Hurd had other issues when he decided to deal drugs than just making money.

The house painter making $45,000 a year doesn’t deal drugs because he has some moral integrity that Hurd lacks and he doesn’t want to risk going to jail. I know not all drug users end up ruining their lives and families and not all drugs are used by kids. But the painter knows that it does happen and Hurd doesn’t care.